Correlation Between MagnaChip Semiconductor and MAVEN WIRELESS

Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and MAVEN WIRELESS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MagnaChip Semiconductor and MAVEN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MagnaChip Semiconductor Corp and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on MagnaChip Semiconductor and MAVEN WIRELESS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MagnaChip Semiconductor with a short position of MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and MAVEN WIRELESS.

Diversification Opportunities for MagnaChip Semiconductor and MAVEN WIRELESS

0.43

Correlation Coefficient

MagnaChip Semiconductor  MAVEN WIRELESS

Very weak diversification

The 3 months correlation between MagnaChip and MAVEN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN and MagnaChip Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MagnaChip Semiconductor Corp are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and MAVEN WIRELESS

Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the MAVEN WIRELESS. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor Corp is 1.2 times less risky than MAVEN WIRELESS. The stock trades about -0.06 of its potential returns per unit of risk. The MAVEN WIRELESS SWEDEN is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  107.00  in MAVEN WIRELESS SWEDEN on October 10, 2024 and sell it today you would lose (21.00) from holding MAVEN WIRELESS SWEDEN or give up 19.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MagnaChip Semiconductor Corp  vs.  MAVEN WIRELESS SWEDEN

MagnaChip Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MagnaChip Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MagnaChip Semiconductor and MAVEN WIRELESS

The main advantage of trading using opposite MagnaChip Semiconductor and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, MAVEN WIRELESS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.

The idea behind MagnaChip Semiconductor Corp and MAVEN WIRELESS SWEDEN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.